Catering to Multichannel Consumers
The issue of multi-channel shopping is become more and more important for retailers of all sizes and across all verticals --- cross-channel buying is expected to more than double by 2012, with nearly 40% of retail sales influenced by the Web and by cross-channel at that point. In light of this trend, several reports have been published lately about shifts in consumer channel use patterns and how retailers are addressing these changes in their operations.
IBM's Multi-Channel Retailing report, explores "the features and functions consumers value while shopping, and the reasons why (they) are quick to shift their loyalty to specific retailers across multiple channels," and aims to help retailers "maximize the multi-channel experience and build customer advocacy so they can successfully evolve with customers' needs over time."
The IBM research team found that:
- Consumer electronics purchases are the most frequently shopped product category among multi-channel shoppers, followed by apparel, accessories and footwear, home improvement, DIY and appliances.
- Apparel, accessories/footwear and grocery have the greatest % of impulse purchase decisions per basket in the US.
- The grocery market had the highest number of impulse purchase decisions per basket, as well as the largest percentage of impulse shoppers, in the UK.
- Over 75% prefer shopping "Online to Store" followed by "Store to Online" (7%) and "Online to Call Center" (3%).
- US consumers spent the most on purchases made between the "Online to Call Center" channels, while UK consumers spent the most between the "Online to Mobile" segments.
- The 18-24 year old group in the US and the 25-34 year old group in the UK have the most multi-channel shoppers.
- 46-50% of shoppers switched loyalties to retailers as they shopped across different channels, with price as their primary motivation for change, followed by convenience and product availability.
- According
to PriceGrabber, 38% of
- A Piper Jaffray report says that "offering products through multiple channels was key for online retail success." While no single e-commerce platform dominates, US online consumers prefer fixed-price third-party sales most, followed by going directly to a retailer’s Website, then search, auction and comparison sites.
- The
e-tailing group reported that "the in-store experience is still far more
robust than what one finds comparably online when stellar store associates
are part of the equation." When they compared the experience of
finding product information at multi-channel retailers’ bricks-and-mortar
locations vs. their online shops, physical stores scored a 3.98 out of 5
across the 50 items evaluated, while online stores averaged 3.05.
Starting off, obviously, with a few articles from Multichannel Merchant magazine, although the writers don't completely agree. On the one hand, the first article explains why retailers should create an integrated multi-channel organization, especially on the marketing side. In fact, studies have shown that "once a customer responds to, and orders from, more than one channel, that their subsequent lifetime value increases significantly" (50-100% gain in lifetime value for two-channel buyers and even more for three-channel buyers!)
On the other hand, the magazine also published two articles that present a different side to this argument. One article claims that "the conventional wisdom that single-channel customers should be encouraged to order from additional channels is flawed," and that the multi-buyer status "is responsible for the superior performance of multichannel customers, not the diverse channel preferences they have displayed when making their purchases." (The second article provides some analytical results that back up these assertions.)
(Another interesting two-part article over at ClickZ - Understanding Multichannel Dynamics and Analyzing Multichannel Dynamics.)
Internet Retailer provides a few examples of best practices for multi-channel retailers. The basic rule is that "retailers that sell in multiple channels should tie those channels together as much as possible." For example, AE.com uses the same media as its core shoppers do, while letting them share information across channels. The site allows visitors to select an item and text information about the item to a friend or a family member’s cell phone, including a code that in-store shoppers can share with a sales assistant who can use it to retrieve the exact item, and a link to the product page
Finally, an E-Commerce News article about using social networking initiatives as a integral part of your multi-channel operations. As the article notes "there's just not enough time anymore to wait and see if your mix of applications, content, catalogs, pricing and service is optimal every 90 days. It needs to be a daily take on performance , and with social networking, that's possible without being obnoxious or intruding to your customers... Optimizing cross-channel experiences can now be done with real-time data based on listening to customers using social networking."
(Added bonus - Retail Systems Research reports on "the role that eCommerce will play, not as an independent entity, but as a player in an integrated cross-channel strategy." What are the biggest business challenges and the most viable near-term opportunities?)
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